The Golden Age with Max Belmont

Greg Dowling (00:05):

Welcome to the FEG Insight Bridge. This is Greg Dowling, head of research and CIO at FEG. This show spans global markets and institutional investments through conversations with some of the world's leading investments, economic and philanthropic minds, to provide insight on how institutional investors can survive and even thrive in the world of markets and finance. On today's podcast, we will find out if all that glitters is really gold. In an investment world that has been captivated by all things new tech, it may surprise some that one of the best investments has been around since the start of recorded history. That is the element of gold. We are excited to host Max Belmont of First Eagle. Max is the portfolio manager of their gold strategy and a senior research analyst on their global value team. On today's podcast, we will learn why there is such renewed interest in this precious metal. Is it caused by fear of inflation, global debt levels or fiat currency concerns? How do you value something that has no cash flows or pays no dividends, and whether the gold mining companies are also as attractive? Stay tuned to see if we are entering the next golden age.

Greg Dowling (01:20):

Max, welcome to the FEG Insight Bridge.

Max Belmont (01:23):

Greg, thank you very much for the warm introduction. I'm certainly delighted to be speaking with you today.

Greg Dowling (01:28):

Yeah, well, we are too. So would you mind introducing yourself and First Eagle?

Max Belmont (01:32):

Absolutely. I am Max Belmont, a portfolio manager and senior research analyst on the Gold strategy at First Eagle Investments. I've been with First Eagle for over a decade now, since 2014, primarily focusing on gold. And in case you are wondering where my accent is from, I was raised in Europe in southern Germany, so I'm a little bit of a mut there.

Greg Dowling (01:56):

All right, so Munich, Munich area. Where are you from in Germany?

Max Belmont (01:59):

No, it's south of Munich, if you're familiar with that area. It's a tri-country area, not Tri-state area. So you have Switzerland in the south, you have Austria to the east and you have Germany to the north. It's the lake of Constance. I was raised in Constance at the lake of Constance. So when I fly home, Greg, I fly into Zurich. That's my home airport. So it's close to different country again.

Greg Dowling (02:21):

Very interesting. First Eagle has a standalone gold fund, but gold is also a part of many of the other strategies. What is the linkage between First Eagle and all these gold funds or gold exposures?

Max Belmont (02:36):

Let me introduce to you quickly First Eagle as well, so you have that background. Who we are today because then I'll tell you about the history that you alluded to. So at First Eagle, we are a privately owned independent asset management firm with right now around 138 billion across five investment teams under management. Each investment team has its own leadership philosophy and process. But I think the common thread is that as a firm we believe in active fundamental research that might lead to alpha when you apply it over the long term. I am part of one of these investment teams, the global value team that has exposure to gold and gold related investments. Now answering your question like how we, how do we get here, which is super interesting and it also goes back to Germany to 1864 Germany. So that's when our heritage and our founding fathers started the company. The company then moved to the 1930s U.S. And so as a result, throughout this time, as you can imagine, the company has been through political uphill economic cycles, unification of Germany because that's how it started in 1864 with Otto von Bismarck. So we have adapted a particular mindset that is long-term oriented with a preservation of capital. But the question that you have to ask yourself as an investor, Greg, is if you want to create the long-term wealth and you want to create resilient portfolios, what can an investor do to potentially minimize those unforeseen unexpected drawdowns? And simply put, at First Eagle, we use gold towards potential hedge characteristics in our portfolios.

Greg Dowling (04:12):

That's fascinating. So I'm assuming then that the Weimar Republic and the hyperinflation of Germany when they were kind of a younger company has had such a dramatic influence on gold and thoughts about inflation hedging. Is that correct?

Max Belmont (04:28):

You nailed it. It's exactly that point. Having the Arnhold family and the Bleichroeder family witness that and having some of their client's deposits in gold clearly helped them withstand those episodes, those very turbulent episodes. So that's where actually gold comes in. That's why we see it as a safe haven, as a potential safe haven and a hedge in our portfolios.

Greg Dowling (04:49):

Alright, so we're going to talk more about gold. There are people on both sides of this, it's pretty interesting. But maybe to build some credibility, how big of an investor is First Eagle in gold? Can you kind of quantify that?

Max Belmont (05:01):

Here's what I can tell you because my compliance team is always very keen of me saying the right things. Publicly stated as July, 2024. And here's what we have. We have around 3.3 million physical ounces of gold that we're holding for our clients in a vault. But that's really like in a vault. And think about it like you see it in the movies, those gold bars. And to add a little bit of clarity what that means in layman terms because some, maybe some of your listeners don't know what 3.3 million ounces of physical gold is. At the end of July, there was close to 8 billion, $8.1 billion in gold bullion and physical gold bullion. You add to this also, we have an allocation to the gold miners. So I think it's fair to assume that our exposure is higher than those $8.1, but that's what we can quantify this moment. So $8 billion at prices end of July that we held in

Greg Dowling (05:56):

Gold. Wow, that's a lot. Now, if I asked you where the vault was and what the combo to the lock was, would you tell me?

Max Belmont (06:02):

I may tell you, but I may have to kill you. So that's undisclosed.

Greg Dowling (06:08):

Understand.

Max Belmont (06:09):

It's a very secretive vault and system there. So, yes.

Greg Dowling (06:13):

It was worth a shot asking. Said this earlier is that there are different views on gold. So one of the world's more famous economists, John Maynard Keynes, one's called gold a barbarous relic basically meaning that it had no, I don't know, true functionality or place in a modern economy. Could you maybe address some of those critics?

Max Belmont (06:33):

Sure. I think if you really take a step back here and think about gold, where does its reputation as a safe haven come from, would be the first question. And I think this has to do in part with its relative stability of supply. What does this mean? If you look on the periodic table and I'm taking you basically back to your high school or early days there and you look at the periodic table, you will find that gold. While it is an element on the periodic table, it has two attributes. A it is dense, it's very dense. So hence it's very heavy and it's scarce, but it's not too scarce. It doesn't rot, rust, or tarnish or otherwise debase. Really an ounce of gold today will be an ounce of gold in a thousand years and was an ounce of gold a thousand years or 2000 years ago. So as a result of this, you have this stability of supply. It also doesn't get consumed. Virtually all the gold that has ever been mined sits in above ground inventory today. Now how much is there? Which is also a very good follow up question. And actually I could ask you this, Greg, do you know how much gold there is in aboveground supplies? If you would put all the gold together in like say a queue or whatever you want to think about it, how much is there in terms of a volume?

Greg Dowling (07:54):

A couple things. I think if I recall from my high school chemistry gold, the element is Au, is that right?

Max Belmont (08:01):

Absolutely, yes it is.

Greg Dowling (08:02):

And then two, and just because I do prep for these calls, I believe, and I could be wrong, but there's maybe eight Olympic sized pools of gold. Is that right?

Max Belmont (08:14):

It depends on the depth of these. So what depth do you assume? The easier way to think about it is, do you play tennis?

Greg Dowling (08:22):

I I don't really play tennis, but I I have played tennis, so yeah, I know the size of the court.

Max Belmont (08:27):

Exactly. Think about the size of the court from one baseline to another baseline. So very easy. that's around the size of a cube of gold. It's a little bit small. It comes in at three feet. So if you build a cube with a side length of 73 feet, then that's all the gold there is in the world that we as humans have ever been mined. And that includes all the jewelry, that includes all the bars that are held by central banks and vaults as public money. This includes all the investment that First Eagle has. So it's a cube and that cube is around 212,000 metric tons to be exact, but that's how much there is. So again, there is just limited supply of gold in the world that we have as humans. It's not as abundant as one we may think.

Max Belmont (09:22):

Now the other thing that I would add to this is that also leads to something else because gold is inert, it's chemically inert Greg, it means it's non-productive, it's non-moving. And because of this, it doesn't have the sensitivity to the business cycles that other commodities do. So think about iron ore, copper steel, the PGMs, the platinum group metals, platinum, palladium and others. Those get used in the industry. Gold doesn't, less than 10%, around 7% of annual gold supply gets used in industry. So because of this, gold doesn't trade with the business cycle. Like when the business cycle is booming, you expect those other commodities to do well. However, during recessionary times, you would expect those other commodities to not provide a potential hedge in your portfolios because these are productive commodities. So gold trades a little bit differently here. And to summarize, think about gold's uselessness from an industrial perspective to make it actually useful from a portfolio construction standpoint. When you think about a financial architecture.

Greg Dowling (10:30):

It's interesting, right, because I get the scarcity, it's permanence, those are important things. But you mentioned it has very limited commercial use, no cash flows, it pays no dividends. And, on top of that you actually have to pay to store it. Why does it maintain its value so much? There are maybe not a lot of other things that are like that, but there are certainly some. Keep pulling on that thread for us.

Max Belmont (10:56):

You're absolutely right. It pays no dividends and it shouldn't pay a dividend or cash flow because if you think about it, unlike money that is someone's asset and at the same time someone's liability, gold is different. Gold is just an asset and no one's liability. Either you own gold or you don't own gold and there is no counterparty risk with gold and there shouldn't be any cash flows that you receive from gold. And you're right, there's something to be said about that we dig it out of the dirt and we put it back into a vault as humans, right? And we store it back in the vault. You have to clearly make sure you know where your gold is and it's in a safe location and you may have to pay an amount to store it. I can tell you we have competitive rates at First Eagle when we store those over 3 billion ounces that I mentioned before.

Max Belmont (11:46):

Now what I tried to highlight to you is this relative stability of supply is over the last 125 years, Greg gold effectively compounded annually the supply, I'm talking about the supply at sub 2% per annum. So here is an asset class that is, as you said, it's an element Au on the periodic table and it doesn't compound and you cannot increase the supply at will and over long periods of time it has maintained its purchasing power. There is a study from 1560 on to 2007 by a former researcher at Berkeley University and he looked at this and he asked himself how did gold behave over the longer periods of term? And it's like, it's one of the longest studies that I am aware of when it comes to gold. And he showed that over 450 years of data since 1560 England and he has done the same from the 1800s in the U.S., that gold has maintained its purchasing power in times of need and has provided a safe haven historically during these tumultous episodes that we have as humans witnessed. So again, while it has been called the various names over time and clearly we're at First Eagle, we are the global value team is a value shop. So we track closely the Buffets and the Munger, the former Mungers of the world. Also, like Buffet and Munger, they were not necessarily in favor of gold. But we think that it's actually this paradoxically this not a productive aspect of gold that makes it useful and provides an allure to mankind over very long periods of time.

Greg Dowling (13:30):

You mentioned that it has limited capacity to grow, crypto is designed to be a little bit like that. What about digital gold? What about the Gen Z-ers who prefer crypto over gold? How would you compare and contrast?

Max Belmont (13:45):

Millennials, Gen Z I think we both agree on that they're tech savvy, right? They know how to use these tools and I think it may be fair to say that the Gen Z, they're open to alternative investments such as Bitcoin and crypto and potentially also gold as they seek to diversify their portfolios beyond the traditional stock and bond components that has worked the 60/40 for many, many years. They may view potentially crypto as an alternative to gold, appreciating the high returns and the decentralized structure. But I want to explain to you and compare and contrast these two asset classes because we talk about digital gold in the terms of crypto, but there's also the real gold that has a longer timeframe. And taking a step back, I think you're right to say that Bitcoin and gold are philosophically similar Greg. Both need to be Maya one via servers and one via dump trucks.

Max Belmont (14:44):

It's a similar process. One has a finite stock. Think about the 21 million Bitcoins out there. And as I told you before, over the last 120 years, what we can say is that gold supply has increased less than 2% per annum. So again, it's also a finite supply, a limited supply that you cannot increase at will or double at any moment in time. And you can say with a certainty what the supply of gold may be in the next 3, 4, 5 years because the miners can just do so much and produce so much. And you have seen also I think the advent of the ETFs. You have the iShares out there, you have seen tremendous influence in those. And if you just look at the largest ones for gold and Bitcoin, what you can say is that the Bitcoin ETF sits at almost 40% right now, as of the gold ETF that has been around for much longer than the iShares Bitcoin ETF.

Max Belmont (15:40):

But importantly I want to highlight is where they differ because that's sometimes that people do not fully grasp. In times of need gold has acted as a potential hedge in one portfolio. So gold is a risk off Bitcoin seems to be a risk on asset that trends and fluctuates more like a growth stock. The best example I can give you for this is just not in that history. Like two years ago in 2022 we've all lived through all that time. In 2022 when the broader equity markets had a negative year, the SOP was down almost 20%, the NASDAQ was down 33% and Bitcoin decreased over 60%, like zero. That year gold bullion provided this ballast, a stabilizing anchor. So that is not to take away from the fact that 2023 and 2024 have been tremendous years for the stock market and Bitcoin in general relative to gold, much better performance. But again, you have much wider fluctuations with Bitcoin and so far what we have seen is that Bitcoin has not provided that stability in times of need when the stock markets are in a broader decline.

Greg Dowling (16:45):

That makes sense. It provides that same diversification, it has limited supply. Now I did want to ask, is gold a hedge against currencies and inflations?

Max Belmont (16:57):

When you take a step back again and look from the outside, I think that gold is often considered an inflation edge and a hedge against fiat currencies. Think about just like looking at the word what the word debasement means. So 2000 years actually was more silver than gold. There was money but you would debase by like looking at that coinage and debasing it by making it actually increasing the copper content and the Roman denarius relative to silver. That's actually like something that you think have to think about. So it's a debase, it provides stability against debasement. It's non-debt money, it's nature's currency and it's an asset, no liability as said before. We discussed it as an asset class that historically has provided investors with a perceived safe haven in times of need. I highlighted a little bit to you the scarcity aspect that is very important for gold, that its supply is coming in at less than 2% per annum over the long term, but it's also a potential hedge against fiat currency devaluation. The way sometimes I think it's easier to think about gold is to think about gold to what the French called unité de compte, it's a fancy word to think about a unit of account. Think about an ounce of gold that you hold in your hand. It's a coin, it's a smaller coin, not a very big coin, it's a small coin but it's an ounce. So it's quite heavy. You, and we all do this to an extent, when you read the newspaper, when you look at like the financial media, well gold went up or gold went down. The way to think about it is gold didn't go up or didn't go down because you still have the same amount, the same ounce of gold in your hand. What fluctuated is the currency that you denominated it in. And a different way to what I'm trying to explain to you is hypothetically gold increases from 1000 U.S. Dollars to 2000. It's not that gold went up, it's that the U.S. Dollar depreciated. So think about a currency pair in this case and vice versa. If gold hypothetically goes from 2000 to 1000, it's not that gold went down, it's actually that your dollars are more worth. That's unique when it comes to gold. And that's when we talk about fiat currency devaluation. But it's also an asset class that is recognized globally. You can denominate gold in every currency, whether you do it in U.S. Dollars, Canadian dollars as a European then Euros and others. But it's not only a potential hedge against currency devaluation, it's also at safe haven and in times of need. And think about geopolitical risks, Greg and many others that we have seen in the recent past where people and governments have looked at gold from a different perspective to just diversify their portfolios.

Greg Dowling (19:40):

Interesting. That's a great way of kind of picturing it, right, is a cross between currencies in their value. Is that why gold has gone up so much? Why has it gone up so much? Is there concern about inflation and then therefore the value of currencies, at least in the U.S.?

Max Belmont (19:58):

Gold is the inverse of confidence. That's something that all your listeners should jot down here. That gold is the inverse of confidence. When confidence is high, you'd expect the price of your potential edge to be lower. And when confidence is low, you'd expect the price of your potential edge to be higher. In simple terms, think about when gold did very well, when did it do very well, historically did very well in the seventies. I'm off appeal, I'm off like uncertainty. It didn't do well in the eighties and nineties on the Reagan and others. The time of systemic belief, it did do well relative to stocks in the 2000s. It started with 9/11 and ended with like if you will with the global financial crisis, didn't outperform stocks in the 2010s. So it's almost this barbell between stocks and gold when one or the other do well. But there are a couple of more recent structural drivers that drive the gold price. Maybe it is, as you said, the fears of higher for longer inflation as the Fed has cut rates recently and not maintaining that 2% inflation target. Clearly they have said that employment for them is more important. You may have investors right now looking to diversify away from U.S. denominated assets. Given the debt burden that we have in the U.S. maybe there are some perceived sanctioned risks of countries outside the U.S. that are looking at it. There are potentially often, we have seen this earlier this year, like fears of devaluation of the Chinese Renminbi and we have had like retail demand in China look at gold and also importantly you have rising geopolitical tensions. So you have a few drivers that are influencing the gold price now. And I think clearly one of the things that weighs on investors is the U.S. debt burden. We're running in very high, large primary deficits at around 7.5% of GDP. That's an unusually high number in particular in times of full employment or low single digit employment. We're looking as we speak at almost $36 trillion in debt and that number is just going up by a trillion every a hundred days or so. So I think gold has reacted rationally in the short term given like these onset of events that have clearly been more disturbing in the overall picture.

Greg Dowling (22:20):

You kind of alluded to it here just a second ago, but was the central banks and you mentioned China and these governments, right? And governments activity in it. Was it a watershed moment for gold when Russia invaded Ukraine and then the U.S. kicked Russia off of Swift? They started to diversify some of their central bank holdings from king dollar to gold and a lot of other people have followed suit. So how much of this rise in gold has really been driven by central banks buying it?

Max Belmont (22:56):

It's hard to say, it's hard to add a number to it Greg. It's certainly a structural driver. And if you look at the evolution of central bank programs, in particular regarding gold, they're influenced by economic, geopolitical and other monetary factors that you alluded to. Looking at history, what we have witnessed is that in the 90s-2008, central banks were sellers, net sellers on average of gold in particular like in the 2000s, the Swiss, the French, the English central bank sold gold. It came with a change, a paradigm change around the global financial crisis that put gold into central bank's portfolios and turned them into net buyers. So if you average it out, not particularly in 2009, 2010, but if you average it out over 10 years from say 2011-12 to 2021, you will find that on average central banks bought around 500 metric tons, 5 0 0 metric tons of gold. In 2022 and 2023 with what you alluded to, they became buyers of over a thousand metric tons of gold. So double previous 10 year average, if you will. And you may have to ask yourself what happened? That's exactly what you highlight, that Russia, Ukraine conflict, the sanctions, the weaponization of the dollar that may have moved and posed this question to a central banker, if I'm a central banker outside the western world, what do I want to hold in custody? Do I want to hold something in custody that cannot be confiscated and I have all that is an asset and none one's liability or do I want to hold something that potentially may be weaponized against me if I have a variant perception? And I'm just letting it stand for what it's worth, right? So the western sections clearly drove Russia against Russia in the structural increase in the demand for gold. How much that is and how that will develop in the future is very hard to say. The jury's still out there and we can't comment on that.

Greg Dowling (25:05):

Related, there's been rumors swirling over the last handful of years that many of the BRICS like Brazil and Russia, India, China, South Africa, would love to create their own currency backed by gold. And again, it's trying to get away from this king dollar that's used in so many different transactions. Is there any legitimacy to any of these rumors and what impact would that have on gold?

Max Belmont (25:30):

The BRICS summit just ended in Moscow not too long ago. And what I think the takeaway that we have from this BRICS summit is that the BRICS may not be pursuing a common currency that's very important. Maybe it was a long shot to begin with, Greg, because you have so many nationalities in there with so many different interests that maybe it's hard to bring them all under one umbrella. And I can say this as a proud European, even Europe has very different interests at moments. One of the takeaways from the summit is that the focus has turned to using national currencies, but there should be additional instruments that they may leverage. One of the these instruments is the BRICS pay and BRICS pay is, from my understanding, it seems that it's a very similar system to the swift system that we have in the west. In a way it's a cross-border transaction architecture that is outside of reach of Western sanctions, right? So what seems to be happening right now is rather than with this latest summit, is that the goal has shifted, but there is a nuance in the goal and the goal has shifted to avoiding the dollar rather than replacing it. That is actually like a very subtle change, but it can have implications to gold. We don't know what gold will mean in this architecture if it means anything at all. But I think the tendencies are clearly, and I read a little bit over the Kazan declaration that they came out with out of this summit and the Article 10 in there is very unique that says we're deeply concerned about unilateral measures and legal sanctions. So I think there is still the feeling, the mutual feeling across these nations, the BRICS nations, that they want to diversify away from the king dollar as you said. But I don't think the dollar will go anywhere in the short term. A dollar is a dollar.

Greg Dowling (27:26):

The dollar is really hard to replace and even if it goes down a little bit, it's going to be a long, long time before they can replace the dollar. I did want to ask about gold miners because that's one thing that you'll do in the gold fund is you'll not only hold kind of physical gold, but you'll at times invest in the gold miners. How do you think about that investment often feel like maybe things have changed, but historically miners dig holes. They aren't, they haven't always been the most capital efficient investments to make. So just kind of your thoughts on gold versus miners and has anything changed? Are they a better value than maybe they were 20, 30 years ago?

Max Belmont (28:09):

Gold mining like any other industry, Greg, and you know this has its pros and cons, is a very high fixed cost of business, the mine lights are usually shorter compared to the bulk copper and base metal investments out there and miners out there. But simply put at First Eagle, we seek exposure to inexpensive ounces. Think about it this way, we have the ability to invest in gold bullion on one side and we recognize that gold bullion has potential advantages. If you really honest with yourself, you'll say that gold in the vault maybe is as useful as gold in the dirt gold that you hadn't dug up, that you haven't extracted from the Earth's crust. So it might be a sensible thing to invest in a miner where you have a margin of safety given the runoff of the miner's reserves, right? If you find a margin of safety in the miner, then it may be sensible to invest in the miner relative to gold bullion. And we consider mining investments at First Eagle along four themes that I want to just quickly highlight for you so you understand the process behind it. The four pillars are the following, it's valuation, resilience, duration, and optionality. Valuation is done on a mine by mine basis at spot current gold price. So we do not forecast the price of gold, we do not think about where it should trade. We just look at the spot price today that the market dictates and we do a sum of the parts at that spot price and that gives us a sense for the margin of safety for the particular miner. Effectively, is it more inexpensive to acquire the ounces via the miners or via the bullion at spot gold prices? Resilience is very important, as you said. Gold mining has its cons and it's a cyclical industry. It's a very cyclical industry. So you want to invest in miners where you have resilience. Think about it as that the miner will survive and will operate effectively during various environments. So, whether they're like financial risks that come their way, operational, technical risks, management and governance risk, political risk and others, you want resilient miners, you want low cost producers. Low cost producers, no matter what happens to the gold price wall will withstand the volatility in the commodity price. You want though also duration, you want long mine life, good balance sheets and you want some optionality, which is partly having a quality management team with demonstrated expiration success. So you're always balancing these two buckets against each other, the miners, royalty businesses, against the gold bullion. Again, it's value investors, that's where you want to actually allocate at any point in time depending on how that relationship works out.

Greg Dowling (30:58):

That's great. It's kind of interesting, yeah, to think about those two and how they get the cost of acquiring an ounce of gold, whether it's in the ground or not. And I know that's been a big part of your strategy over the years. Maybe one just last question before we kind of start to wrap it up a little bit, but any thoughts between physical gold and a financial instrument with gold like GLD? Is there any difference that investors should be aware of?

Max Belmont (31:21):

So there are subtle differences, clearly. Think about if you own physical bullion and you may have acquired it at Costco, which has rolled out and it was in the news this year that they're rolling out gold bullion. The thought that you should have with gold bullion is it's taxed as a collectible. It's not taxed at long-term capital gains. That happens also with the GLD. But what is important is if you hold an ounce of hold in your hand, it's what you have to think about that you highlighted before, like where do you store it? Make sure it's in a safe place. If you ever want to monetize it, how are you going to monetize it again? Are you monetizing it via volume dealer? How do you sell the gold effectively? And to whom? That's a little bit more streamlined with the GLD that hold gold bullion, but it's more of a financial instrument and has a grant or trust behind it. So you have some counterparty risk, it's stored in different vaults in particular in London, that they have disclosed. It's a different instrument. Clearly, each come with the pros and cons and then you clearly have them, the mutual funds and others like us or like the direct investments in the miners that you can also have as an option if you want to allocate to this asset class.

Greg Dowling (32:39):

I love Costco. I mean not only can you get a giant tub of peanut butter, but you can get gold bullion. That is absolutely great.

Max Belmont (32:47):

It's pretty special. I agree with you. What do you have in your cart? Well.

Greg Dowling (32:52):

So if listeners want to learn more about gold, are there any books or any other resources that you'd point them to?

Max Belmont (33:00):

Two things, Greg that have helped me, and I think one is, I've mentioned this before, is a book that documents the English American experience from 1560 to 2007. That book is called the Golden Constant and it was written by Roy Jastram and again, he examines this long-term value of gold as a stable store of wealth over centuries. And that's, I think, very unique because here you have like a longer term perspective on it. It's harder to get this book, it may be a bit more expensive than others, but if you can, this is a very good starting point if you're a historian and you want to learn by inquiring the old. A more like feasible book for the listeners, maybe like a book that came out a few years ago, which is The New Case for Gold by James Rickards. He makes effectively in the book, a case for gold. But it has also like some very colorful and shiny case studies and little episodes and chapters.

Greg Dowling (33:58):

Oh, that's great. Yeah, I haven't read that, but we've had him at our Forum, our Investment Forum a handful of years ago. He always has some great analogies, great stories. Those are two great recommendations. So when you're not counting your gold, what are your hobbies? What do you like to do?

Max Belmont (34:12):

How I respond to this, Greg? This is a very difficult one since I have a selection of them, depending on what year you ask me about.

Greg Dowling (34:21):

A serial hobbyist. Yeah. What are you doing now? What fills your free time? What do you enjoy?

Max Belmont (34:26):

I love reading. Like one of the things I think is feeding the mind and improving the mind. I just finished a different book that was not on gold, which was called Ultra Learning. I don't know if you heard about it.

Greg Dowling (34:36):

I have, yeah.

Max Belmont (34:37):

Scott Young in this case makes a case on how to effectively and efficiently learn new skills, knowledge, retain the knowledge. I think it gave me new perspectives. So in the book, I'll tell you this, he gave his case study of learning to draw. So I want to make a 30 day challenge to myself to learn to draw a little bit better. So I have ordered a book called Drawing on the Right Side of the Brain compared to the Left, the Analyticals. So the right hemisphere is more of the creative one and there's a beautiful book about that teaches you about perception and how you should view things, which I thought, you know what? Like why not, make it a quick challenge on that? So that's one of the things that I'm doing right now. The other thing that I would tell you is, while I enjoy very much cooking and dealing with new recipes, I have gone down a little bit in the rabbit hole of investing in an espresso machine with a standalone grinder. And that's very dangerous. So I say there's something very satisfying about the process of brewing your perfect shot of espresso. It's almost like you are waiting for the perfect wave and you look at it and you're like, how does this taste? Like, how can you experiment with different beans techniques, extraction times, different, very, very different things. So, that's another satisfying hobby of mine. And like everybody else, lastly I would mention to you something that keeps me anchored, makes me feel energized and stay focused. It's just like some workouts, right? During the pandemic of a few years ago, I invested in something that I never thought it would be such a humbling experience. I invested in a pair of gymnastics rings.

Greg Dowling (36:14):

I could imagine that is a great workout.

Max Belmont (36:16):

Yeah there's plenty of ways to challenge yourselves and when you have to challenge your own body and lift your own body, it's one of the hardest things but that you actually ever have to do or I have to do. I'm never going to do all these, like when you look at the Olympics, when you look watch the Olympics that in Paris, I have a very different respect for those who do an Iron Man or others super superhuman strength.

Greg Dowling (36:42):

Well, Max, maybe what you can do is combine a couple of these, try seven espresso, and then hit those rings and I bet it'll change your workout.

Max Belmont (36:49):

Absolutely, yes. It's a good booster that espresso.

Greg Dowling (36:52):

Thank you so much. What a golden opportunity it was to have you on our podcast. We've really enjoyed. So thank you so much.

Max Belmont (36:58):

Thank you for having me, Greg. Truly a pleasure and all the best.

Greg Dowling (37:03):

If you are interested in more information on FEG, check out our website www.feg.com. And don't forget to subscribe to our communications so you don't miss the next episode. Please keep in mind that this information is intended to be general education that needs to be framed within the unique risk and return objectives of each client. Therefore, nobody should consider these to be FEG recommendations. This podcast was prepared by FEG. Neither the information nor any opinion expressed in this podcast constitutes an offer or an invitation to make an offer to buy or sell any securities. The views and opinions expressed by guest speakers are solely their own and do not necessarily represent the views or opinions of their firm or of FEG.

 

Disclosures

Unless otherwise stated, all information contained in this material is as of 6 November 2024.

The opinions expressed are not necessarily those of the firm. These materials are provided for informational purposes only. These opinions are not intended to be a forecast of future events, a guarantee of future results, or investment advice. Any statistics contained herein have been obtained from sources believed to be reliable, but the accuracy of this information cannot be guaranteed. The views expressed herein may change at any time subsequent to the date of issue hereof. The information provided is not to be construed as a recommendation to buy, hold or sell or the solicitation or an offer to buy or sell any fund or security.

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Past performance is not indicative of future results.

Definitions

Alpha is often referred to as excess returns in relation to a benchmark, when adjusted for risk.

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